The Hindu Business Line : ‘Railways eyes PPP mode for non-core biz’

New Delhi, Feb. 26 The Rail Budget 2008-09 is “a continuation of the new thinking process initiated last year of playing with volume, reducing unit cost, reading the market through dynamic pricing, besides consciously cutting down working expenses by a whopping Rs 1,000 crore”, the Indian Railways Financial Commissioner, Ms Sudha Chobe, said today.

In an interview to Business Line at Rail Bhavan soon after the Rail Budget presentation in Parliament Ms. Chobe said that any organisation’s test is its financial condition and Indian Railways (IR) have been on a sound footing continuously for the last three or four years. She said the system has been “strict” about expenditure and was able to save Rs 1,000 crore in the current fiscal year.

‘Not a massive amount’

She said that internal resources generation of Rs 21,126 crore postulated for the next fiscal is not a ‘massive amount’ considering the plan size of the Railways of Rs 37,500 crore for 2008-09. She said that through freight rate adjustments and commercial exploitation of surplus lands , the requisite resources could be generated. She said that when budgetary support is shrinking the system was becoming stronger by innovative processes.

“We cannot follow the traditional route. Some new thinking has to be there and that is why we are going for public-private partnerships (PPP) in certain activities. In case it works out and we gain sufficient experience, perhaps we might go in other fields also.”

Asked to elaborate the innovative processes, Ms Chobe said firmly “as of now, for train operation perhaps we would like to avoid going through PPP route. In case it is investment only on annuity basis or from borrowing or through contract, we will have to do it”.

Private participation

Ms Chobe said the non-core areas where private participation would supervene include logistics parks, terminals, wagon investment scheme, cleanliness and other activities that are not directly connected with train operation.

As freight earnings have become the mainstay of IR providing the needed funding for the system to run on an even keel, Ms Chobe said high speed freight trains through better formation of tracks, better rails and better rolling stocks to keep goods train running at 70 to 100 km per hour would be undertaken.

Relief for people

As freight earnings have been cross-subsidising the passenger and suburban fares, Ms Chobe said that socio-economic considerations demand the system to help the passengers.

She hastened to add that in freight “we are charging more only through commodities that could bear the burden or what the traffic could bear and it is better to give concession and relief to the people”.

To a specific query about the Rail Land Development Authority (RLDA) remaining on the drawing board instead of intensifying its core activities of commercialising the surplus lands vested with the system, the Financial Commissioner said that works have been set off on the Bombay-Kurla-Bandra segment for commercial exploitation of land and in certain other places too.

Besides, budget hotels of IR would also be rolled out soon. She foresees Rs 4,000 crore to come to the Railways coffer through the RLDA activities in the next fiscal.

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